GOP leaders say pensions, budget to overshadow session

January 2, 2018

FRANKFORT, Ky. (AP) — First-day pomp quickly gave way to harsh realities for Kentucky’s top Republican legislative leaders, who said Tuesday that tough work ahead on a new state budget and proposed fixes to underfunded public pension systems will overshadow this year’s General Assembly session.

Senate President Robert Stivers told reporters he hopes a pension overhaul is offered “as soon as possible,” but didn’t give a specific timetable for action after lawmakers convened this year’s session. Stivers promised “ample opportunity” for public review and comments on proposed legislation to repair one of the country’s worst-funded public pension systems.

“It is tough,” he said. “But this is what we’re elected to do. We would love to have rainbows and puppy dogs every day, but the reality is the pension system started having problems 20 years ago with certain things that were not actuarially sound that people said were actuarially sound.”

Republican Gov. Matt Bevin wanted to convene a special legislative session last year to vote on a proposed pension overhaul, but his plan drew significant opposition from state workers.

State workers are owed billions of dollars in benefits over the next 30 years, but the government is at least $41 billion short, according to official estimates.

The plan proposed by Bevin and other GOP leaders last October would have eventually closed the pension system and replaced it with a 401(k)-style plan while capping benefits for current employees at 27 years of service and imposing a 3 percent pay cut.

Senate GOP leaders said Tuesday that the pension issue needs to be tackled in coming weeks, but for now they’re awaiting an actuarial analysis on how much draft proposals would cost taxpayers.

“I wish we had a bill today and we could pass it in five days, but we’re just not prepared to release a bill until we have the (actuarial) score,” Senate Majority Floor Leader Damon Thayer said.

House Speaker Pro Tem David Osborne said Tuesday that lawmakers also were awaiting feedback from officials at the retirement systems regarding some language in the draft proposals.

“The process will dictate the timeline,” he told reporters. “The plan is to move as quickly as we possibly can once we have all the information we have available.”

Republicans have overwhelming majorities in the House and Senate.

A pension overhaul looms as a key part of the equation when lawmakers face their most essential task — writing the state’s next two-year operating budget.

“I think that’s why we need to deal with it to know what our budget will look like, knowing the contributions from our General Fund that will have to be designated to deal with our pension obligations,” Stivers said.

It will be the first time Republicans will have complete control of how Kentucky spends the public’s money since the GOP took control of the House after the 2016 elections.

Bevin has said the budget “won’t be pretty,” as lawmakers look for money to spend on the struggling pension system. Thayer said Tuesday the budget work will be “extremely difficult.”

“We’re going to have to make cuts, no matter what,” Thayer said in an interview. “If we don’t get a pension bill passed, the cuts are going to be very deep. If we can get a pension bill passed, there will be cuts but it’s likely that they won’t be as bad.”

Public school advocates voiced their concerns about a potential pension overhaul and other issues affecting education at a Capitol rally shortly after lawmakers convened Tuesday.

Tiffany Dunn, a teacher in Jefferson County, said she’s a Republican but disagrees with the direction the GOP-led legislature is leading public education. She criticized a state law allowing public charter schools and worries about pension changes and potential budget cuts to education.

“The type of conservatism going on right now in Frankfort is not the type of conservatism that I want to be a part of,” she said.

The Senate’s opening day of 2018 had a celebratory mood. Republican Sen. Jimmy Higdon was formally voted in as the Senate’s president pro tem.